Seed Phrase: Why Is Essential To Safeguard It?

When you create a cryptocurrency wallet, the wallet software will generate a random sequence of numbers known as a “seed.” This seed is used to create all the private keys that control your cryptocurrency funds. 

A seed phrase, a mnemonic phrase, or a recovery phrase is a crucial component that is essential to generating a cryptocurrency wallet’s private keys. 

It serves as a human-readable and easy-to-remember representation of a complex cryptographic key. The seed phrase typically consists of a series of random words (usually 12, 18, or 24 words long) chosen from a predefined list of words.

Instead of dealing with the raw sequence of numbers, which would be difficult to remember and prone to errors, the seed phrase provides a user-friendly way to back up and restore your wallet.

The seed phrase is designed to be easy to write down on paper or memorize, making it a secure way to back up your wallet. 

Trust wallet backup

The seed phrases are not just made of random words. The words come from standards called derivation paths, such as BIP39, Electrum, or SLIP39.

Most wallets use the BIP39 standard (Bitcoin Improvement Proposal 39), which has a specific list of 2048 words, and this is the derivation path you will see the most.

Here is a link to the BIP39 wordlist from Github. Alternatively, we have made the list available in PDF format, for your convenience.

cryptocurrency wallet example

Understanding what a seed phrase is and its role within a cryptocurrency wallet is crucial.

Because the safety of your wallet and digital assets like cryptocurrencies and NFTs are linked to how much you understand and how safe you can keep your seed phrases. 

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Why is the Seed Phrase so Important

The seed phrase is essential because:

If you lose your cryptocurrency wallet, e.g., the laptop where your wallet was installed has suffered irrecoverable damage, you’ll need the seed phrase to restore the wallet to another device (e.g., another laptop or mobile phone, or desktop computer)

If you want your cryptocurrency wallet available on a second or third device, you need the seed phrase to import the wallet. For example, your cryptocurrency wallet is already installed on your laptop, but you want to have it also available on your mobile phone. In that case, after downloading the wallet app, you can use the seed phrase to import your wallet.

seed phrase as wallet recovery method

But, this simple but ingenious mechanism to restore or import your wallet is a double edge sword because if someone with bad intentions gets to know your seed phrase, this person will be able to import your wallet and transfer your crypto assets from your wallet to a wallet that only this person controls. 

25 Bitcoin (BTC) Stolen
Protect Your Seed Phrase From Hackers
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It has become quite common for scammers to use phishing scams to trick cryptocurrency users into giving away their seed phrases, which mostly always leads to those people losing their crypto assets forever. 

protect your seed phrase from hackers and scammers

If you have a cryptocurrency wallet or are planning to set up one, you should learn about Phishing scams and how to identify and avoid them.

Phishing Scams

How to recognize a phishing attack and protect your assets from scammers.
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Could not Someone Guess a Seed Phrase, Intentionally or by Accident?

This is a common question that most new cryptocurrency users do ask after learning that a seed phrase is composed of ‘only’ 12 or 24 simple words.

And the answer is yes; it is possible to guess a seed phrase.

But, statistically, to guess a seed phrase is practically impossible. The same impossible as winning the lottery four times in a row.

Can someone guess a seed phrase?

With the difference that while in a lottery, you know how much cash you are winning those four times in a row, with a seed phrase, you cannot know if you will hit the jackpot, an empty wallet, or anything in between.

Do you think any hacker out there will spend computing power and years and years of work to guess maybe a seed phrase that may lead to an empty wallet?

There are much easier ways for people with bad intentions to get to your wallet.

Why use simple words as a wallet recovery method anyway?

Now that it is clear that guessing a 12 or 24 words seed phrase is practically impossible let’s admire how ingenious it is to use words instead of a more complex wallet backup method.

Imagine that after setting up a new wallet, you are asked to take note of the seed number for safekeeping: 7f1d0525928056c0a1ce553065a07a1974691076b6c79214111533781419d6d4cb1a2e5fb0800 9b16551e76da038d6a62510aa0cd683eb4c4834903f09e61500.

And because you know about crypto safety good practices, you don’t want to take a screenshot or picture, and you will take note of the number on a piece of paper or metal sheet.

Seed phrase storage

Designed to resist fire and water
Seed phrase

In such a case, you would need to be very careful to take note of that long seed number without making mistakes. 

And even though you are a very careful and meticulous person, many people out there would make mistakes while taking note of the seed number or not do it because it is too much work.

Instead, taking note of the 12 words seed phrase is a much easier endeavor, and the chances of making mistakes are minimal: disorder patient obeys hello below able ready wasp skull rubber upper debris.

Because when restoring a wallet, the wallet will use those 12 words seed phrase to calculate the seed number 7f1…500, saving you a lot of time and effort.

Different ways to import a cryptocurrency wallet: Phrase, Keystore, Private Key, Address.

There are other ways to import a wallet, but you should inform yourself about what to do and how to do it before you decide to use another method.

For example, in a multi-coin wallet, you may save a private key (typically a string of 64 alphanumeric characters), thinking you can use it to recover the wallet. But, with a private key, you will only be able to recover the wallet account for that specific private key. 

If what we explain does not make complete sense, you need to increase your knowledge or stick with the seed phrase as a cryptocurrency wallet recovery method.

What is the Difference Between Seed Phrase and Private Key?

A private key is a unique alphanumeric string of characters that is used to access and manage cryptocurrency stored in a wallet. 

It is a secret piece of information that is used to sign transactions and authenticate ownership of the cryptocurrency assets.

In contrast, a seed phrase (also known as a recovery phrase or mnemonic phrase) is a sequence of words that is used to generate a private key or a series of private keys. 

It is a backup mechanism to restore access to the wallet in case the private key is lost or stolen.

The main difference between a private key and a seed phrase is their purpose and how they are used. 

A private key is used for accessing and managing cryptocurrency funds stored in a wallet. It is a unique identifier that provides secure access to a specific wallet address. 

On the other hand, a seed phrase is used to recover or restore access to a wallet if the private key is lost or stolen.

Wallet Private Keys

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KNOWLEDGE

How to Backup a Seed Phrase and Keep It Safe

Here are the key reasons why backing up the seed phrase is essential:

– Security: The seed phrase is the only way to regain access to your funds if you lose or forget your wallet’s password or if your device gets damaged, lost, or stolen. Without it, your cryptocurrencies become irrecoverable.

– No central authority: Cryptocurrencies are decentralized, meaning no central authority can help you recover your funds. The seed phrase is the decentralized solution to ensure you remain in control of your assets.

– Resilience to hardware failures: Storing cryptocurrencies on a hardware wallet or digital wallet is secure, but hardware failures can still occur. The seed phrase allows you to restore your wallet on a new device.

– Protection against software issues: Software wallets can encounter bugs, updates, or compatibility issues. You can always restore your wallet on a different platform or version if you have your seed phrase.

– Contingency planning: In case of unexpected events like natural disasters or accidents, having multiple backups in different secure locations ensures you can recover your funds.

– Ownership and responsibility: Cryptocurrencies give you full control over your funds, which means you are solely responsible for their security. Backing up the seed phrase is a critical aspect of responsible ownership.

Remember, the seed phrase should be kept safe, offline, and in multiple secure locations. Avoid storing it digitally or sharing it with anyone to prevent potential hacking or theft attempts.

Crypto Safety First YouTube Video: There are three ways to back up your seed phrase and a secret way to keep the seed words hidden.

Crypto Safety First YouTube Video: How to secure your crypto seed phrase from fire damage by engraving it in stainless steel.

While the seed phase allows the restoration of a wallet and recovery of the crypto assets, this may not be possible without the correct derivation path.

Will you or your heirs be able to restore your wallets and recover your crypto assets in a few years? 

Find out by learning about Mr.ChadCryptoWhale5000’s story:

Wrong Derivation Path
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Wallets with No Seed Phrases, Only Private Keys

If you don’t feel comfortable with keeping the seed phrase, you can opt for MCP Wallets, which are wallets that only have private keys.

Apart from not having seed phrases, the MCP wallet has other advantages, such as:

– Easy to recover

– No single point of failure for phishing

– Entirely user-controlled

To learn more about MCP wallets, check out our ‘Cryptocurrency Wallet Private Key’ post, or look at this comprehensive Medium story where we overlook the Binance Self-Custody Web3 MCP wallet.

Binance Web3 Wallet
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Seed phrase Frequently Asked Questions (FAQ)

We can also learn from the questions of other people. Because some of the questions may raise topics that we haven’t thought about yet.

How should I store my seed phrase?

Seed phrases should be stored in a safe and secure location, such as a fireproof safe or a secure location in your home. 

Making multiple copies and storing them in separate locations is also important. 

Unless you are technically proficient, you should not store a seed phrase on an electronic device or online, as they are vulnerable to hacking and cyberattacks.

Home Safe Box

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Can someone else use my seed phrase to access my wallet?

Yes, someone else can use your seed phrase to access your wallet and steal your cryptocurrencies. Your seed phrase is essentially the private key to your wallet and is the only way to access your funds. 

Anyone with access to your seed phrase can import it into a compatible wallet software and gain full access to your account.

Therefore, it is essential to keep your seed phrase secure and confidential. You should never share your seed phrase with anyone or store it in an easily accessible location. 

Can I recover my wallet without my seed phrase?

It is very difficult to recover your wallet without your seed phrase. 

Your seed phrase is the most important piece of information when accessing your wallet and recovering it.

If you lose your seed phrase, it is important to remember where you may have stored it or if you have any backups.

If you cannot find your seed phrase or recover it, you may be out of luck and unable to recover your wallet.

Is it possible to change my seed phrase?

It is not possible to change your seed phrase once it has been generated. 

Your seed phrase is a unique set of words that are randomly generated when you create your wallet, and it cannot be changed or modified in any way.

The purpose of the seed phrase is to provide you with a secure and private way to access your wallet. 

If it were possible to change the seed phrase, it would defeat the purpose of having a secure backup that only you have access to.

Can I use my seed phrase on any wallet?

In general, most wallets that support the same seed phrase standards (such as BIP39 or SLIP39) can be used interchangeably with the same seed phrase. 

This means that you can import your seed phrase into another compatible wallet and access your funds using the same seed phrase.

However, it’s important to note that not all wallets use the same seed phrase standards, and some may have their own unique implementation. 

In this case, you may not be able to use your seed phrase on a different wallet that uses a different standard or implementation.

Derivation Path

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Is it safe to store my seed phrase in a digital format?

Storing your seed phrase in a digital format comes with risks and should be cautiously approached. 

While storing your seed phrase digitally can be more convenient, it can also increase the risk of theft or loss if not adequately secured.

If you store your seed phrase in a digital format, secure storage methods such as encryption and password protection are essential. 

You should also ensure that your digital storage device or platform is secure, up-to-date, and not susceptible to malware or hacking attacks.

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Are you looking for additional information about the same or similar topics?

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Now that you clearly understand what a seed phrase is and how important it is, you may be interested in increasing your knowledge and learning about digital safety and how to keep your digital assets safe.

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And don’t forget to also learn about digital safety good practices because the more good digital safety practices you follow, the more secure your digital assets will be.

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